The Wall Street Journal - 09.08.2019

A4|Friday, August 9, 2019 PWLC101112HTGKBFAM123456789OIXX **** THEWALL STREET JOURNAL.

“Lowrates in the housing

market are not an unambigu-

ously good development,” said

Tendayi Kapfidze, chief econo-

mist at LendingTree.

Much of the mortgage activ-

ity fueled by lower rates is in

the form of refinancings, which

can help mask a slowdown that

by many measures is gripping

the housing market. The Mort-

gage Bankers Association ex-

pects refinancing volume to rise

16% this year and to make up

30% of mortgage loans. By com-

parison, the group expects

mortgage-purchase loans to rise

about 6%.

Black Knight Inc., a mort-

gage-data and technology firm,

estimates that 9.7 million U.S.

homeowners would qualify for

and benefit from a refinancing.

That is a 7.8 million increase

from when rates peaked in No-

vember 2018.

“These are some of the low-

est rates we’ve ever had,” said

Guy Cecala, chief executive of

Inside Mortgage Finance, an in-

dustry research group. “It cer-

tainly brings most people into

refinance territory.”

Summer Garrett, a loan con-

sultant at Caliber Home Loans

Inc. in Dallas, said refinancings

make up half of the loans she is

working on, up from less than

20% earlier in the year when

both Treasury yields and 30-

year mortgage rates were

higher.

WASHINGTON—President

Trump’s campaign and other

prominent Republican groups

said they are temporarily freez-

ing spending onTwitterInc.

after the social-media platform

locked the account belonging

to Senate Majority Leader

Mitch McConnell’s campaign.

The @teammitch account

was locked after it posted this

week a video of a protest out-

side the Kentucky Republican’s

Louisville home. In the video,

a protester could be heard

saying “stab the mother— in

the heart.” Twitter requires

account holders to take down

any media deemed to incite vi-

olence, even if the holder is

the target of the offending

content.

The McConnell campaign

has declined to remove the

video, and said Thursday that

it was still locked out of the

account and couldn’t post new

content. The campaign said

Twitter told it the account will

remain locked until it deletes

the video. Meanwhile, the

@teammitch feed still appears

on Twitter, with the video no

longer available.

Campaign manager Kevin

Golden said the dispute

showed the subjective nature

of what he called the “speech

police.” Referring to recent

anti-McConnell tweets, Mr.

Golden said Twitter will “allow

the words ‘Massacre Mitch’ to

trend nationally...but locks our

account for posting actual

threats against us.”

A Twitter spokesman said

in a statement that “the users

were temporarily locked out of

their accounts for a tweet that

violated our violent threats

policy, specifically threats in-

volving physical safety.”

Republican groups rallied to

the McConnell team’s defense.

“Twitter’s hostile actions to-

ward Leader McConnell’s cam-

paign are outrageous and we

will not tolerate it,” said Jesse

Hunt, the communications di-

rector for the National Republi-

can Senatorial Committee. “The

NRSC will suspend all spending

with Twitter until further no-

tice. We will not spend our re-

sources on a platform that si-

lences conservatives.”

The NRSC was soon joined

by other groups. Richard Wal-

ters, the chief of staff for the

Republican National Commit-

tee, said in a tweet that the

RNC and the Trump campaign

would halt new spending in

protest. Parker Poling, the ex-

ecutive director of the Na-

tional Republican Congressio-

nal Committee, said she had

directed her group to halt

spending as well.

Spending levels by Republi-

can groups have been modest.

A Center for Responsive

Politics analysis found that the

NRSC spent $11,200 on Twitter

from June 2018 through the

first week of January 2019.

The House Republicans’ cam-

paign arm spent $40,000, mak-

ing it the 10th biggest spender

among political groups. The

Trump campaign didn’t report

any spending on Twitter in

that period, instead spending

about $8 million onFacebook

Inc. ads and $1.8 million onAl-

phabetInc.’s Google, according

to the analysis.

The developments come

amid a feud between conser-

vatives and social-media com-

panies. President Trump and

other Republicans claim that

Twitter is biased against their

policy positions. They point to

one example in 2017, when

Twitter blocked Republican

Marsha Blackburn from buying

paid promotions for her suc-

cessful Senate bid because of a

clip that included a controver-

sial antiabortion message.

Twitter Chief Executive Jack

Dorsey later said the company

had made a mistake, but has

denied bias.

Twitter has been trying to

limit abuse and harassment on

its platform, which often leads

to controversial judgments

about content.

BYSIOBHANHUGHES

GOP to

Suspend

Spending

On Twitter

The dust-up comes

amid a feud between

conservatives and

social-media firms.

tised6:30 p.m. Many wore red

“Moms Demand Action” shirts

or buttons, members of the

gun-control-advocacy group

that started after the 2012

Sandy Hook school shooting.

A spokeswoman for Mr. Ba-

con said the doors opened

early to allow the line to start

filing in.

Megan Gentrup, the Ne-

braska chapter leader for the

group, lingered outside for at

least an hour after the event,

hoping Mr. Bacon would come

to talk to their group of about

two dozen. He didn’t.

“Gun violence is not some-

thing that is over there,” Ms.

Gentrup said. Three people

were shot in three separate in-

cidents in Omaha on Sunday

morning, according to local

news reports.

Mr. Bacon said he supports

laws to restrict mentally ill

people’s access to guns, com-

monly known as red-flag laws,

but is concerned the regula-

tions can be abused by gov-

ernment and wants a high bur-

den of proof on whether

someone is dangerous enough

to warrant the step.

Ms. Gentrup took the same

position as Senate Democrats

did, saying red-flag laws are

“a great start, but it will not

be the end for us.”

To win the majority, Repub-

licans need to defend the seats

they have and wrest 19 seats

from Democrats in 2020. Most

are holding firm on opposing

background checks for all gun

purchases, worried about it

upsetting their core base.

Evidence on the effect of

background checks on mass

shootings is inconclusive, ac-

cording to the nonpartisan

RAND Corp. Still, broad sup-

port exists for stricter laws on

firearm sales.

GOP Rep. Mike Turner, who

represents Dayton, Ohio,

tweeted Tuesday that he now

supports legislation that pre-

vents the sale of military-style

weapons to civilians. Rep.

Adam Kinzinger (R., Ill.) said

on Monday he is in favor of

red-flag laws and now sup-

ports universal background

checks.

In the Waterloo town hall,

while most people in the heav-

ily Republican audience were

vocal in their public opposition

to new gun restrictions, some

of them in interviews also ap-

peared to support specific gun-

control proposals that their

congressman opposed.

“We have enough gun laws

in place in this country,” said

Ed Walter, who wore a black

shirt with a firearm on it.

When asked if he would sup-

port background checks for all

gun purchases, the 59-year-old

said he was fine with that.

Harry and Marie Pitner of

Omaha came to support Mr.

Bacon, in part because they

worried that a liberal crowd

would be unkind to the con-

gressman.

Asked about expanding

background checks to more

gun purchases, Mr. Pitner said,

“I would [support it], but I

don’t want anybody to take

our guns away from us.”

WATERLOO, Neb.—Rep. Don
Bacon fielded questions on his
stance on gun-control legisla-
tion in an overflowing room in
the back of a sports bar, and
the loudest cheers for the
swing-seat Republican were
when he stated his opposition.
Mr. Bacon, who represents
Omaha and its surrounding ar-
eas and won re-election last
year by 2 percentage points, is
against widening background
checks for gun purchases. Like
most of his GOP colleagues, his
views on gun policy were un-
changed by the weekend
shootings that left at least 31
people dead, although Presi-
dent Trump and Senate Major-
ity Leader Mitch McConnell
are now talking about how to
address gun violence.
“I don’t see the goodness of
putting all of this government
red tape on ya, when you go
back and this would have had a
negligible impact on the
crimes that we’ve had,” Mr.
Bacon said. “So the cost versus
benefit, I don’t see it.”
When the House passed a
bill in February requiring uni-
versal background checks, Mr.
Bacon was one of 188 Republi-
cans who voted against it. The
Senate hasn’t taken up the bill,
and it remains unclear whether
there is bipartisan support for
any significant gun legislation.
At a town hall Wednesday
set to talk about the spring
floods, Mr. Bacon was asked
repeatedly about gun safety, an
assault-weapons ban, and ex-
panding background checks.
Several dozen constituents
were outside, feeling duped
that Mr. Bacon’s staff opened
the doors before the adver-

BYNATALIEANDREWS

On Trip Home, Lawmaker Defends Firearms

Representative Don Bacon of Nebraska fielded questions on gun-control legislation in a town hall

meeting on Wednesday, originally scheduled to discuss severe flooding in the rural area this spring.

NA

TALIE ANDREWS/THE WALL STREET JOURNAL

U.S. NEWS

saidhe spoke with Mr. Trump

on Thursday, didn’t endorse a

specific course of action, nor

did he say he would call back

members of the Senate back to

work from their August recess,

saying that the time would be

better used to review options

that could win bipartisan sup-

port than to engage in “endless

point scoring.”

Mr. McConnell cited a pro-

posal by Sens. Lindsey Graham

(R., S.C.) and Richard Blumen-

thal (D., Conn.) to extend

grants to states enacting red-

flag laws, as well as a push for

expanded background checks

from Sens. Joe Manchin (D.,

W.Va.) and Patrick Toomey (R.,

Pa.), as the two main pieces of

conversation. On background

checks, Mr. McConnell said:

“There’s a lot of support for

that and there’s a bipartisan

bill in the Senate.”

Mr. McConnell hasn’t taken

any action on background-

check legislation that passed

the House this year, but focus

on the issue has risen since the

shootings.

Mr. Trump has expressed in-

terest in background checks

and red-flag laws, which per-

mit law-enforcement officials

to confiscate guns after a judge

issues a court order.

The White House has been

reviewing both legislative and

executive options, and Mr.

Trump has been in close touch

with lawmakers from both par-

ties pursuing potential bills.

Mr. McConnell said he ex-

pected an assault weapons ban

to be part of the discussion,

but said he thought the other

two items would be the main

focus. “What we can’t do is fail

to pass something,” he said.

House Speaker Nancy Pelosi

(D., Calif.) and Senate Minority

Leader Chuck Schumer (D.,

N.Y.) said Thursday that had

spoken with Mr. Trump by

phone. They said the president

reached out after Mrs. Pelosi

sent a letter to the president

requesting that he call the Sen-

ate back into session to con-

sider background-check bills

passed in the House.

They said they told Mr.

Trump the best way forward

was for Mr. McConnell to have

the Senate take up those bills

and for the president to sign

them into law. They said the

president gave his assurances

that he would review the bipar-

tisan House-passed legislation.

The president also spoke

this week with National Rifle

Association Chief Executive

Wayne LaPierre, said a person

familiar with the conversation.

In a statement, Mr. LaPierre

declined to discuss private

conversations but said the

NRA “opposes any legislation

that unfairly infringes upon

the rights of law-abiding citi-

zens.” He added that the “pro-

posals being discussed by

many would not have pre-

vented the horrific tragedies

in El Paso and Dayton.”

WASHINGTON—President
Trump and Senate Majority
Leader Mitch McConnell are
discussing how to tackle gun
violence following two mass
shootings, with the Kentucky
Republican saying that red-flag
and background-check propos-
als will be “front and center”
in the Senate deliberations.
Underscoring a sense of ur-
gency after weekend shootings
in El Paso, Texas, and Dayton,
Ohio, that killed 31 people, Mr.
McConnell told Louisville’s
NewsRadio 840 that the presi-
dent is “anxious to get an out-
come and so am I.”
The majority leader, who

BYCATHERINELUCEY
ANDSIOBHANHUGHES

McConnell and Trump Talk Guns

Martin,a Nashville, Tenn.-based
loan officer at Movement Mort-
gage, a retail mortgage lender
that originates about $13 billion
of loans a year. “Every time the
Fed starts talking is when my
phone starts ringing off the
hook.”
The Federal Reserve trimmed
its benchmark interest rate last
week for the first time in a de-
cade and after several years of
rate increases. Ms. Martin said
she has seen a sharp increase
this week in applications for re-
financings and new-home pur-
chases.
That figure doesn’t entirely
factor in the most recent
changes in the 10-year note be-
cause lenders often take some
time to reprice their mortgage
rates after a big bond-yield
drop, said Ralph McLaughlin,
deputy chief economist at real-
estate data provider CoreLogic
Inc. That means lenders could
soon start offering even lower
rates. Until then, lenders may
include perks such as credits at
closing to entice borrowers, he
said.
What might seem like a
small decline in mortgage rates
can have a big effect on
monthly payments. A 5% rate on
a $500,000 30-year loan trans-
lates into a monthly payment of
$2,684, according to Lending-
Tree Inc., an online loan-infor-
mation site. At 4%, the monthly
payment would fall to $2,387,
excluding taxes and insurance.
Jim Cook, an advertising ex-
ecutive in Chicago, decided to

Continued from Page One

Borrowers

Rush to

Refinance

refinance mortgages on his

home and a rental property a

week ago after receiving a text

from a college buddy urging

him to take advantage of the

drop in rates.

“When he texted me I

thought the savings would be

minimal, like $100,” Mr. Cook

said. “Then I got the quotes in

my inbox and showed them to

my wife, and she said, ‘That’s

saving us $500!’ ”

Refinancing this month will

cut about half a percentage

point from Mr. Cook’s home

mortgage rate and reduce

monthly payments on the two

properties to $3,392 from

$3,844, he said.

Falling rates often lift the

housing market. A 1-percentage-

point decrease in rates can typi-

cally lead to an increase in

home sales of 7% to 8%, accord-

ing to Lawrence Yun, chief

economist at the National Asso-

ciation of Realtors. But Mr. Yun

said the current drop in mort-

gage rates might not have the

same effect if consumers believe

the falling rates are a product of

broader economic uncertainty.

“Low rates are always wel-

come, but right now [low] rates

are occurring for the wrong rea-

sons,” Mr. Yun said. Investment

accounts that borrowers

planned to tap for a down pay-

ment have also likely been hit

by stock-market swings. Volatile

markets have left many con-

sumers nervous. U.S. stocks suf-

fered their worst day of the

year Monday amid worries

about trade frictions and slow-

ing growth, though they rallied

later in the week.

Falling rates can also inflate

home prices because borrowers

can afford bigger mortgages

when rates are low. That can

harm those still looking to buy

their first home because high

prices are already pushing many

would-be borrowers out of the

housing market.

For example, a borrower

with a budget of $2,000 a

month can afford a mortgage of

about $373,000 when rates are

5%, according to LendingTree

calculations. That same bor-

rower can afford a mortgage of

about $419,000 when rates fall

to 4%.

Anopen house in Saratoga, Calif., in July. As mortgage rates

decline, many borrowers have begun flooding lenders with calls.

NICK

GONZALES FOR THE WALL STREET JOURNAL

Differentialbetween

30-yearmortgagerates

and10-yearTreasuryyields

FallingBehind

Treasuryyieldsarefallingtoofastformortgage

lenders—andmortgagerates—tokeepup.

5.55.04.54.03.53.0%

U.S.homeownerswhowould

qualifyforandbenefitfroma

refinancing,atdifferentrates

Comparisonof10-yearTreasuryyields

and30-yearmortgagerates

Source: Mortgage News Daily (mortgage rate); Refinitiv (Treasury yield);

Black Knight Inc. (homeowners)

Mortgagerate

Treasury yield

5%

1

2

3

4

2019 Feb. March April May June July Aug.

20

0

10

1.9 %

1.

1.

1.

%

2019 Aug.